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Meredith Whitney Predicts Credit Cards Will Pull Back Further

Posted by: RateAPY Bank Rates News
April 8th, 2010

Meredith Whitney is the Chief Executive Officer of her own company, Meredith Whitney Advisory Group. She is well respected on Wall Street as one who understands commercial banking. In 2007 she predicted the housing crisis that has now rocked America for nearly three years. In a recent interview with Fortune magazine, she warns that credit card companies will likely pull back further from lending and that credit will become more expensive for the poor.

In February, the Federal Reserve, as banking regulator, tightened restrictions on credit card companies. Credit card companies are now required to give sixty days written notice before raising interest rates. Meredith believes not being able to raise interest rates instantly when defaults look likely will cause companies to further reduce credit lines. This may cause poorer citizens to rely on extremely expensive loans such as pay check advances.